Woodside Energy has entered an agreement to acquire half of BHP Billiton’s Scarborough area assets in the Canarvon Basin, in offshore Western Australia.
The nearly US$400 million ($524 million) agreement includes Woodside receiving a 25 per cent stake in Scarborough and a 50 per cent stake in the nearby Jupiter and Thebe gas fields.
The Scarborough, Thebe, and Jupiter fields contain an estimated 8.7 trillion cubit feet of gas, with Woodside’s share approximately 2.6 trillion cubic feet.
The low price Woodside has purchased assets for equates to US15c per million cubic feet, approximately one fifth of the amount BHP sold its Browse stake for in 2012, The Australian reports.
This reflects the current oversupply of LNG worldwide and the difficulty of developing in the area, which is 300km offshore.
Exxon, which owns 50 per cent of the field, however, is seeking to build a floating LNG development.
An Exxon spokesperson highlighted that the development of Scarborough would be challenging due to the depth, resource characteristics, “execution complexities”, and the current LNG market.
“Floating LNG is considered the lead development option based on a balance of economic, environmental, and social considerations,” he said.
Woodside CEO Peter Coleman said that adding Carnarvon Basin volumes to the Australian portfolio would complement the company’s growth strategy and reinforce the company’s deep water and LNG capabilities.
“We look forward to working with ExxonMobil and BHP Billiton following completion of the transaction to progress commercialisation of these world-class resources,” he said.